<div class="py-4" id="valueLineTabbedContent">
    <div class="fr-view">
        <h2 class="text-3xl mb-2 font-bold">Part 4: Studying a Stock</h2>
        <h4 class="text-xl font-bold my-2">
            How To Use The
            Value Line Investment Survey Page
        </h4>
        <p class="mb-2">
            To start studying a stock, we suggest
            that you concentrate on the major
            features found on every company page of
            Ratings &amp; Reports. These are:
        </p>
        <ol>
            <li class="mb-2">
                The Value Line Ranks: Timeliness™,
                Safety™, Technical;
            </li>
            <li class="mb-2">The Analyst's Commentary;</li>
            <li class="mb-2">Financial Estimates;</li>
            <li class="mb-2">Historical Financial Data;</li>
            <li class="mb-2">Annual Rates (of Change);</li>
            <li class="mb-2">Target Price Range;</li>
            <li class="mb-2">
                Projections (of 3- to 5-year stock
                prices);
            </li>
            <li class="mb-2">Price/Earnings Ratios.</li>
        </ol>
        
        <h4 class="text-xl font-bold my-2">Timeliness Rank</h4>
        <p class="mb-2">
            One way Value Line ranks stocks is by
            their expected price performance
            relative to all of the stocks in <em
                >The Value Line Investment Survey®</em
            >, over the coming six to 12 months. The
            Timeliness rank identifies those stocks
            followed in The Value Line Investment
            Survey which are likely to have the best
            relative performance.
        </p>
        <p class="mb-2">
            All of the stocks Value Line tracks in <em
                >The Value Line Investment Survey</em
            > are ranked in relationship to each other,
            from 1 (the highest rank) to 5 (the lowest
            rank). Stocks ranked 1 and 2 are expected
            to show stronger price performance than the
            remaining stocks, while those ranked 4 and
            5 are likely to underperform or have weaker
            price performance.&nbsp;
        </p>
        <p class="mb-2">At any given time</p>
        <p class="mb-2">
            100 stocks are ranked 1<br />300 stocks
            are ranked 2<br />900 stocks are ranked
            3<br />300 stocks are ranked 4<br />100
            stocks are ranked 5
        </p>
        <p class="mb-2">
            Relative earnings and price growth over
            the past 10 years is the major factor in
            determining Timeliness. Companies whose
            earnings growth over the past 10 years
            has been greater than the increase in
            their stocks' prices tend to be ranked 1
            or 2. Other factors that influence the
            Timeliness rankings are stock price
            momentum, quarterly earnings
            performance, and earnings surprises.
        </p>
        <p class="mb-2">
            Stocks ranked 1 and 2 for Timeliness can
            be more volatile than the market in
            general, and frequently are stocks of
            smaller companies.
        </p>
        <h3>
            Using Timeliness and Other Factors in
            Choosing Stocks
        </h3>
        <h5 class="text-lg font-bold w-full">
            The Economy And Value Line's Market
            Strategy&nbsp;
        </h5>
        <p class="mb-2">
            <em>First,</em>
            read Value Line's current summary and opinion
            of the economy, the stock market, and advisable
            investment strategy entitled "The Value Line
            Equity View" in
            <em>Selection &amp; Opinion</em>.
        </p>
        <p class="mb-2">
            Remember that it is not necessary for
            the ordinary investor, who usually has
            other business interests, to read
            everything that is published. The
            service is so organized that it can also
            be used as a reference. You can look in
            the <em>Summary &amp; Index</em> every week
            to find updated references about stocks that
            you own or in which you may be interested.
            The stock ranks also provide you with buy
            and sell recommendations, which you may act
            upon.
        </p>
        <p class="mb-2">
            We must caution that a prudent investor
            ought to think of stocks as components
            of a portfolio, rather than as single
            entities. Diversification reduces the
            overall risk of stocks within a
            portfolio. Diversification is an
            important advantage, long recognized by
            sophisticated investors, yet often
            ignored by many who think in terms of
            single stocks without reference to the
            portfolio as a whole.
        </p>
        <h5 class="text-lg font-bold w-full">Timely Industries</h5>
        <p class="mb-2">
            <em>Second,</em>
            look at industries ranked in order of Timeliness
            in the screen on page 24 of the weekly
            <em>Summary &amp; Index</em>. To be sure
            that your portfolio is diversified, pick
            from that list at least six industries
            shown to be most timely -- i.e., those
            industries ranked one through six.
        </p>
        <h5 class="text-lg font-bold w-full">Timely Stocks</h5>
        <p class="mb-2">
            <em>Third,</em>
            look to the 100 stocks ranked 1 (Highest)
            and the 300 ranked 2 (Above Average) for
            Timeliness. These ranks for relative performance
            for the next six to 12 months appear in both
            <em>Ratings &amp; Reports</em>
            and in the weekly
            <em>Summary &amp; Index</em>. (Once a
            stock ranked 1 or 2 for Timeliness has
            been bought, it may be held until its
            rank drops to a 3, 4, or 5.)
        </p>
        <h5 class="text-lg font-bold w-full">
            Timely Stocks Within Timely Industries
        </h5>
        <p class="mb-2">
            <em>Fourth,</em> pick at
            least six stocks that are in the top-ranked
            industries. Then, if possible, pick at least
            four or more stocks -- either those that
            also have Safety ranks of 1 or 2 and are
            within the top 12 industries or those that
            ranked 1 or 2 for Timeliness or Safety, even
            though the industry isn't top ranked. To
            narrow the list, follow steps five through
            seven. Remember that the suggested diversification
            is ten or more stocks.
        </p>
        <h5 class="text-lg font-bold w-full">The Big Picture</h5>
        <p class="mb-2">
            <em>Fifth,</em> read the
            industry comments that precede the stock
            report to see the big picture of the long-term
            growth patterns of earnings and values for
            stocks in the industries you are interested
            in.
        </p>
        <h5 class="text-lg font-bold w-full">Safety Constraints</h5>
        <p class="mb-2">
            <em>Sixth,</em> from the
            stocks selected so far, choose those that
            also conform to your safety requirements.
        </p>
        <p class="mb-2">
            If you are a conservative investor, or
            if you think the market is headed lower,
            give preference to stocks ranked 1 or 2
            for Safety.
        </p>
        <p class="mb-2">
            If you are bullish on the market and are
            willing to buy more volatile, or
            riskier, stocks, accept those with lower
            Safety rankings from 3 down to 5.
        </p>
        <p class="mb-2">
            A low safety rank may be acceptable when
            the market is undervalued. At such a
            time, riskier stocks are usually
            depressed. Since they are apt to be more
            volatile, they are capable of rising
            faster when confidence in the market is
            restored.
        </p>
        <h5 class="text-lg font-bold w-full">Dividend Requirements</h5>
        <p class="mb-2">
            <em>Seventh,</em>
            select from the remaining choices stocks
            that meet your current dividend requirements.
            Dividends for the coming year are shown in
            the
            <em>Summary &amp; Index</em>
            and on
            <em>Ratings &amp; Reports</em>
            pages, as well as many screens and articles
            that appear in
            <em>Selection &amp; Opinion</em>. Bear
            in mind that it may be difficult to find
            a stock that is ideal on all counts. It
            may be necessary to make certain
            concessions, accepting a lower dividend
            yield, depending upon the relative
            importance of your various goals. For
            example, conservative investors may at
            times have to select stocks ranked 3 for
            either Safety or Timeliness.
        </p>
        
        <h4 class="text-xl font-bold my-2">How Timeliness Rankings Change</h4>
        <p class="mb-2">
            There are several circumstances that may
            cause a stock's Timeliness rank to
            change. This includes:
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                The release of a company's earnings
                report. A company that reports
                earnings which are good relative to
                those of other companies may have
                its stock moved up in rank, while a
                company reporting poor earnings
                could see its stock's rank drop.
            </li>
            <li class="mb-2">
                A change in the price of a stock can
                also cause a stock's rank to change.
                A change in price carries less
                weight than a change in earnings,
                but it is still an important
                determinant. Generally speaking,
                strong relative price performance is
                a plus, while negative relative
                price performance is a minus
                (relative to all other approximately
                stocks covered in <em
                    >The Value Line Investment
                    Survey</em
                >).
            </li>
            <li class="mb-2">
                The "Dynamism of the Ranking
                System." This phrase means that a
                stock's rank can change even if a
                company's earnings and stock price
                remain the same. That's because a
                fixed number of stocks are always
                ranked 1, 2, etc. Every time one
                stock's Timeliness rank moves up or
                down, another's must also change. As
                an example, let's suppose one
                company reports unusually good
                earnings, causing its stock's
                Timeliness rank to rise from 2 to 1.
                Since there can be only 100 stocks
                ranked 1, some other stock must fall
                to a rank of 2, even though there
                has been no change in its earnings
                or price.
            </li>
        </ul>
        
        <h4 class="text-xl font-bold my-2">Safety Rank</h4>
        <p class="mb-2">
            Value Line also ranks stocks for Safety
            by analyzing the total risk of a stock
            compared to the stocks in <em
                >The Value Line Investment Survey</em
            >. Each of the stocks tracked in
            <em>The Value Line Investment Survey</em
            > is ranked in relationship to each other,
            from 1 (the highest rank) to 5 (the lowest
            rank).
        </p>
        <p class="mb-2">
            <em>Safety</em> is a quality rank, not a
            performance rank, and stocks ranked 1 and
            2 are most suitable for conservative investors;
            those ranked 4 and 5 will be more volatile.
            Volatility means prices can move dramatically
            and often unpredictably, in either direction.
        </p>
        <p class="mb-2">
            The major influences on a stock's Safety
            rank are the company's financial
            strength, as measured by balance sheet
            and financial ratios, and the stability
            of its price over the past five years.
        </p>
        
        <h4 class="text-xl font-bold my-2">Technical Rank</h4>
        <p class="mb-2">
            Value Line provides a Technical rank for
            each stock as a predictor of short term
            (three to six months) price changes.
            Like the other Value Line ranks, this
            one is relative, assigning scores to
            each stock tracked in <em
                >The Value Line Investment Survey</em
            > in relation to the others, from 1 (the
            highest rank) to 5 (the lowest rank).
        </p>
        <p class="mb-2">
            The rank itself is based on a
            proprietary model which evaluates 10
            price trends over the past year.&nbsp;
        </p>
        
        <h4 class="text-xl font-bold my-2">Analyst's Commentary</h4>
        <figure class="float-right">
            <img
                src="https://www.valueline.com/getmedia/3a68b24a-f3bf-450d-add5-08fd4faa7118/commentary.jpg"
                style="width: 300px;"
                class="fr-fic fr-dii fr-fir"
            />
        </figure>
        <p class="mb-2">
            Every Value Line page contains a written
            commentary, describing the analyst's
            assessment of how the stock will perform
            in the future. The text section provides
            an opportunity for the analyst to:
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                Evaluate and interpret the data
                that's available
            </li>
            <li class="mb-2">
                Explain the factors that he or she
                thinks are important to the forecast
            </li>
            <li class="mb-2">
                Provide relevant additional
                information
            </li>
        </ul>
        <p class="mb-2">
            The analyst's commentary is especially
            useful when the sales or earnings
            numbers don't tell the full story about
            a stock's performance, or when a new
            trend is emerging. For example, a stock
            might have a low Timeliness rank, but
            the analyst may have reason to believe
            that earnings will turn around in the
            near future.
        </p>
        <p class="mb-2">
            The reverse could be true as well. The
            analyst might caution investors about
            earnings surprises, expected management
            changes or other factors that might make
            a stock less desirable than its recent
            history might indicate.
        </p>
        <p class="mb-2">
            The commentary is the forum for
            explaining why conditions are likely to
            change, and giving the reader insight
            into why these changes will happen.
        </p>
        
        <h4 class="text-xl font-bold my-2">Financial Estimates</h4>
        <p class="mb-2">
            A wide range of financial data is
            presented in the statistical section in
            the center of each Value Line page. The
            numbers to the right in <strong
                >bold</strong
            > typeface are estimates made by Value Line's
            security analysts. These estimates cover
            a wide variety of items, some of which are:
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                Sales, Earnings, and Dividends Per
                Share
            </li>
            <li class="mb-2">
                Annual Price/Earnings Ratios and
                Dividend Yields
            </li>
            <li class="mb-2">
                Total Sales, Net Profit Margins,
                Long-term Debt and Shareholders'
                Equity
            </li>
        </ul>
        <p class="mb-2">
            In most cases, estimates are made for
            the current year, the next year, and the
            period out 3 to 5 years.
        </p>
        
        <figure class="float-right">
            <img
                src="https://www.valueline.com/getmedia/b380f64c-d00b-42f1-8fb1-e12725b06757/historic_data.jpg"
                style="width: 300px;"
                class="fr-fic fr-dii fr-fir"
            />
        </figure>
        <h4 class="text-xl font-bold my-2">Historical Financial Data</h4>
        <p class="mb-2">
            The center section of every Value Line
            page, known as the statistical array,
            contains a wide range of historical
            performance information for a company
            and its stock.
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                Some of the historical information
                is reported for as much as 17 years
                into the past, some for 12 years,
                and the balance for 10 years,
                provided in each case that the
                company has been in operation that
                long.
            </li>
            <li class="mb-2">
                The data include ratios such as the
                operating margin, net profit margin,
                and return on shareholders' equity.
            </li>
        </ul>
        <p class="mb-2">
            This information helps identify trends
            in the company's performance. The trends
            are important because they show whether
            there has been a consistent pattern
            across a number of different areas,
            including sales, earnings, operating and
            profit margins, and return on equity.
        </p>
        <p class="mb-2">
            You can use this data to do your own
            analysis of a stock's potential and to
            help determine whether or not you want
            to add it to your portfolio.
        </p>
        
        <h4 class="text-xl font-bold my-2">Annual Rates (Of Change)</h4>
        <figure class="float-right">
            <img
                src="https://www.valueline.com/getmedia/0c5fcb63-ce94-43ae-ad5b-fc700e504757/rates.jpg"
                style="width: 300px;"
                class="fr-fic fr-dii fr-fir"
            />
        </figure>
        <p class="mb-2">
            Value Line provides historical data and
            projects future performance for five key
            measures of a company's current
            financial health and estimated growth
            potential.
        </p>
        <p class="mb-2">
            This capsule summary of important
            indicators gives you, at a glance, an
            overview of how a company has been doing
            and how it is likely to perform in the
            future.
        </p>
        <p class="mb-2">
            This data, which is usually positive but
            can also be negative, is expressed as an
            annual compound rate of change over the
            past 10 years and the past five years as
            well as projected rates three to five
            years into the future.
        </p>
        <p class="mb-2">The measures are:</p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                Sales - Gross volume less returns,
                discounts, and allowances; net
                sales.
            </li>
            <li class="mb-2">
                Cash flow - The total of net income
                plus non-cash charges (depreciation,
                amortization, and depletion) minus
                preferred dividends (if any).
            </li>
            <li class="mb-2">
                Earnings - A company's total profit
                before non-recurring gains or
                losses, but after all other
                expenses.
            </li>
            <li class="mb-2">
                Dividends - A payout to shareholders
                determined by the Board of
                Directors.
            </li>
            <li class="mb-2">
                Book value - Net worth (including
                intangible assets), less preferred
                stock at liquidating or redemption
                value, divided by common shares
                outstanding.
            </li>
        </ul>
        
        <h4 class="text-xl font-bold my-2">Target Price Range</h4>
        <figure class="float-right">
            <img
                src="https://www.valueline.com/getmedia/2fc7df74-112e-46de-bd6a-32c2fe588f7a/price_range.jpg"
                style="width: 300px;"
                class="fr-fic fr-dii fr-fir"
            />
        </figure>
        <p class="mb-2">
            A Target Price Range appears in the
            upper right portion of each Value Line
            report, in the same section as the stock
            price graph. It shows the range in which
            Value Line's analyst thinks a stock's
            price is most likely to trade in the
            three- to five-year period indicated
            just above.
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                The Top Horizontal Line indicates
                the highest level at which the stock
                is likely to trade in the three-year
                period.
            </li>
            <li class="mb-2">
                The Bottom Horizontal Line indicates
                the lowest level at which the stock
                is likely to trade in the three-year
                period.
            </li>
        </ul>
        <p class="mb-2">
            The Target Price Range is based on
            information available to an analyst at
            the time a new report is written, but
            could obviously change in the future.
            The data is the same as that appearing
            in the PROJECTIONS box to the left of
            the graph. (see <strong
                >Projections</strong
            >)
        </p>
        
        <h4 class="text-xl font-bold my-2">Projections</h4>
        <figure class="float-right">
            <img
                src="https://www.valueline.com/getmedia/41568ed5-3112-469b-9020-516f6f093ff2/projections.jpg"
                style="width: 300px;"
                class="fr-fic fr-dii fr-fir"
            />
        </figure>
        <p class="mb-2">
            The stock price PROJECTIONS box appears
            in the upper left of every Value Line
            report, just below the stock ranks. This
            shows:
        </p>
        <ul class="mb-2 pl-2 mx-4 list-disc">
            <li class="mb-2">
                The most likely high and low price
                of a stock in the time period
                specified.
            </li>
            <li class="mb-2">
                The percentage gain (or loss) if the
                high or low prices are reached.
            </li>
            <li class="mb-2">
                The total compound annual rates of
                return to shareholders (including
                dividends) if the forecast prices
                are attained.
            </li>
        </ul>
        <p class="mb-2">
            The price projections are derived from
            the forecasts of earnings per share and
            price/earnings ratios shown in the far
            right column of the large statistical
            section. They are based on the best
            information available at the time a
            report is written and, obviously, may
            change in the future.
        </p>
        
        <h4 class="text-xl font-bold my-2">Price/Earnings Ratios</h4>
        <p class="mb-2">
            Earnings per share is the amount of a
            company's profit or net income after
            taxes attributable to each of its common
            shares outstanding. The price of each
            share is its value based on the last
            public sale of a share. The ratio
            between them, or the price divided by
            the earnings, is the stock's P/E.
        </p>
        <p class="mb-2">
            For example, if ABC Corp's share price
            was $22.50 and its earnings per share
            $1.25, the P/E ratio would be 18. If its
            earnings were $1.50 and its price
            $22.50, then its P/E would be 15. And if
            its earnings were $1 and the price
            $22.50, its P/E would be 22.5.
        </p>
        <p class="mb-2">
            There is no "right" or "wrong" P/E, but
            there is a current median P/E, or
            midpoint of the ratios of all the stocks
            Value Line tracks for <em
                >The Value Line Investment Survey.</em
            >
            The median is shown each week on the front
            cover of the Summary &amp; Index section.
            On March 8, 2013, for example, that median
            was 16.1. That means that roughly half of
            all stocks in
            <em>The Value Line Investment Survey</em
            > had a higher P/E and half had a lower P/E
            as of that particular date than the median.
        </p>
        <p class="mb-2">
            In general, buyers will pay higher
            prices and accept a higher P/E to own
            the stock of a company whose earnings
            they believe will grow at a faster rate
            than those of the average company. In
            fact, one of the fascinating things
            about investors is that they are often
            willing to pay high prices for certain
            "hot" stocks that have low, or even no,
            earnings on the anticipation that they
            will be money makers in the future. The
            reverse is also true.
        </p>
        <h5 class="text-lg font-bold w-full">
            Compute A P/E
            Ratio
        </h5>
        <p class="mb-2">
            Value Line computes the P/E ratio that
            appears at the top of the Value Line
            page (highlighted) using the current
            price and an earnings figure that
            typically includes six months of past
            performance and six months of
            anticipated earnings based on the
            analyst's assessment of current data. In
            contrast, a trailing P/E is a ratio of
            the current price to the past year's
            worth of reported data.
        </p>
        <p class="mb-2">
            &nbsp;A trailing P/E, which is the
            number usually reported in the financial
            press, can sometimes be misleading if
            you're considering buying a stock,
            because it does not give you information
            about future expectations. A company
            whose earnings are about to fall might
            appear to be selling at a modest P/E
            based on reported data. But if, in fact,
            the company reports a big drop in
            earnings in the near future, the price
            may also drop and any advantage offered
            by the modest P/E will disappear. That
            is the type of information a Value Line
            analyst is alert to, and the information
            can influence a P/E that includes six
            months of projections.
        </p>
        <p class="mb-2">
            Value Line also provides the 10-year
            median P/E that puts the recent P/E in
            historical perspective. This information
            shows what investors have been willing
            to pay for a stock in the past. If the
            current P/E is higher than that median,
            it suggests that investors are
            optimistic that the company's earnings
            will grow.
        </p>
        <p class="mb-2">
            Remember, though, that general economic
            conditions and the momentum of the stock
            market itself also exert a major impact
            on stock prices and therefore on P/E
            ratios. If valuations in general are
            high, a company's current stock price
            may be higher than it might be in more
            "normal" times.
        </p>
        <h5 class="text-lg font-bold w-full">
            Using P/E
            Information
        </h5>
        <p class="mb-2">
            You can use the P/E as a factor to help
            evaluate whether or not to buy a
            particular stock at a particular time.
        </p>
        <ol class="mb-2 pl-2 mx-4 list-decimal">
            <li class="mb-2">
                If you believe that earnings are
                going up and that the current
                price/earnings ratio will be
                maintained, you might want to buy
                now, because you may benefit from a
                future earnings increase.
            </li>
            <li class="mb-2">
                If the earnings estimate is for
                continued growth but the P/E is
                already high, you may want to wait
                for a dip in prices in the market as
                a whole for an opportunity to buy
                without paying more than you want to
                for the stock based on the total
                return you anticipate.
            </li>
        </ol>
        <h5 class="text-lg font-bold w-full">
            Changing P/Es
        </h5>
        <p class="mb-2">
            Stocks of companies whose earnings grow
            quickly tend to have higher P/E ratios
            than stocks of companies whose earnings
            grow more slowly.
        </p>
        <p class="mb-2">
            Suppose ABC's earnings had been growing
            at an annual rate of 13% over the past
            five years, it was selling at a price of
            $22.50 a share and had a P/E ratio of
            18. If the company's earnings are
            expected to jump from $1.25 this year to
            $1.50 next year, that would be a 20%
            growth rate [$0.25 ÷ $1.25 = 20%].
            Suppose also that ABC has developed a
            hot new product and it appears that the
            new, stronger rate of earnings will
            persist for several years?
        </p>
        <p class="mb-2">
            In that case, investors will probably be
            willing to pay more for the stock and be
            willing to accept a higher P/E ratio
            than that of the general market. For
            example, if the price went up to $30 a
            share based on earnings of $1.50 a
            share, the P/E would be 20 [$30 ÷ $1.50
            = 20].
        </p>
        <p class="mb-2">
            Price/earnings ratios and stock prices
            can also go down. If earnings are
            expected to fall, e.g., to $0.96 a
            share, investors looking at the reasons
            for the weakness may conclude that the
            company's business prospects have
            dimmed. If that happens, the price may
            slide, perhaps to $11.50, which produces
            a P/E of 12 [$11.50 ÷ $0.96 = 12].&nbsp;
        </p>
        
        <h4 class="text-xl font-bold my-2">A Final Word</h4>
        <p class="mb-2">
            &nbsp;Value Line University has provided
            a basic tutorial for those getting
            started with the important
            responsibility of building their own
            investment portfolios. We have
            introduced you to the tools you need to
            analyze the fundamentals underlying the
            Value Line approach to building a
            portfolio. For more knowledgeable
            investors, the links to various pages of
            The Value Line Investment Survey provide
            more complex and detailed information.
        </p>
        <p class="mb-2">
            All investors, of course, must always
            bear in mind that the market constantly
            changes, that with change come
            surprises, and that there is always
            risk. Fortunes have been made and lost
            in the stock market, but over the long
            term, the stock market has outperformed
            all other investment options.
            Nevertheless, risk is always there.
        </p>
        <p class="mb-2">
            And that is why every investor, or
            potential investor, must carefully
            determine his or her risk tolerance and
            set clear investment goals that reflect
            said tolerance. We hope we have shown
            you how to do just that at Value Line
            University.&nbsp;
        </p>
    </div>
</div>
